The European Union’s Carbon Removals and Carbon Farming (CRCF) framework risks worsening the financial situation of small-scale farmers, undermining rural development and could fuel land grabbing. The EU urgently needs a sustainable alternative in which both farmers and nature can thrive.

Carbon markets are not the right tools for empowering farmers. Instead, the sector needs a holistic approach that adopts a social, economic, and environmental lens, with a particular focus on farmer agency and rural prosperity. If the EU is serious about improving farmers’ lives, then social livelihoods and well-being are core concerns, not poorly designed carbon schemes and weak agricultural policy. 

Carbon tunnel vision

A few months ago, Climate Farmers, a European regenerative farming network, published a series of posts explaining its reasons for withdrawing from the voluntary carbon market (VCM). The saga culminated in a position paper criticising the inadequacies of the VCM and offering suggestions on how to improve it. 

Overall, the arguments are solid: rampant costs associated with implementation, not to mention monitoring, reporting and verification, high financial risks linked to potential reversals, insecure and unstable income, and a carbon tunnel vision that completely ignores how nature and agriculture work. 

Climate Farmers also emphasised the lack of social safeguards, stating that current schemes are merely designed to reinforce the status quo instead of bringing additional income for smaller, more diverse farms. In other words, such schemes empower large-scale industrial practices, not ecological stewardship.

Certifiably problematic

Meanwhile, in the EU, policymakers are in the process of finalising their own mechanism, which borrows many of the worst practices of the voluntary carbon market. Already in December 2024, the Carbon Removals and Carbon Farming (CRCF) Regulation was published, with work on the so-called carbon farming methodologies racing ahead. These cover agriculture and agroforestry on mineral soils, the planting of trees, and the rewetting and restoration of peatland, all of which will affect land stewards. In this context, many of the same issues flagged by Climate Farmers have come up. 

Aware of the difficulties stringent rules would impose (particularly on small-scale farmers), the EU has responded with a simplification wave: no quantification models are prescribed, baselines are set to zero, sustainability criteria are weak – the list goes on. 

Yet this “easing the administrative burden” has been detrimental to the robustness of the scheme, resulting in a series of draft methodologies that are unscientific, and are not certain to have any climate benefit at all. 

The conclusion is clear: measuring carbon sequestration in nature is complex, and cannot be done with reasonable levels of accuracy. Designing a scheme that exclusively capitalises on quantifying carbon stored in the soil or trees simply clashes with farming realities. By sacrificing environmental soundness at the altar of administrative ease, the EU is attempting to reconcile the irreconcilable in what appears to be a misguided attempt to legitimise its faulty carbon scheme. 

Where are the social safeguards?

To make matters worse, the CRCF has left crucial social aspects in limbo. Recital 25 of the Regulation mentions “the need to avoid the acquisition of land for speculative purposes resulting in negative effects on rural communities, as well as the need to respect the rights of local communities and indigenous people affected by those activities”. This is partially incorporated under Article 8(3), which lists the avoidance of land speculation as one of the elements the certification methodologies must cover. And yet, nowhere in any of the carbon farming draft methodologies is this addressed. 

In a report titled Land Squeeze, the International Panel of Experts on Sustainable Food Systems (IPES-Food), a global thinktank, delves into ‘green-grabbing’, a phenomenon involving land purchases by governments and corporations for carbon and biodiversity offset projects. These account for 20% of large-scale land deals worldwide. In tandem, green grabs have been increasing land inequality: in central and eastern Europe, for instance, land prices have tripled. This is also a problem in Scotland, where interest in carbon credit schemes has spurred land acquisition by private investors and corporations. 

Undoubtedly, land grabbing tears at the very fabric of rural life, has contributed to the disappearance of small farms and led to rising land prices. This, in turn, blocks access to land, which has repercussions for new generations and rural abandonment. With this in mind, it is worrying that the Commission has sidelined these issues in the methodologies.

On a related note, the CRCF is failing to address the disparities in land tenure. Data from 2020 shows that rented land accounts for 46% of the total utilised agricultural area, while 48% is both owned and farmed by the same party. This implies that some of the land enrolled in a future CRCF scheme will be managed by someone other than the land owner. This raises issues around credit ownership and the long-term monitoring of and liability for potential storage reversals. It could also result in unfair compensation and potential power imbalances between the land manager and the owner.

CAPitulation

If crediting schemes are inadequate, how might the EU respond to the issues faced by small-scale farmers? The tool with the greatest unlocked potential is the Common Agricultural Policy (CAP). Unfortunately, the proposal for the next phase of the CAP is far from satisfactory. 

Firstly, it merges agricultural funds into a National and Regional Partnership (NRP) fund, amounting to €865 billion. Of this, €300 billion has been ringfenced for agriculture, almost all of which will go towards income support for farmers. Among others, income support includes payments per hectare owned by the farmer, funding for actions relevant to the environment, or funding for implementing new technologies on-farm.

In addition, the draft CAP scraps the traditional two-pillar structure of the scheme: direct payments under the European Agricultural Guarantee Fund (covering eco-schemes and conditionality) and rural development under the European Agricultural Fund for Rural Development. Note that a weaker “Farm Stewardship” model (Article 3) will replace the original conditionality scheme. 

Undermining social resilience

Overall, the proposal has no ringfenced budget for environmental and climate action. Some may be tempted to interpret this as being pro-farmer, but agriculture depends on nature and cannot long function in opposition to it. Rural livelihoods depend on healthy ecosystems. They need clean water, healthy soil, and diverse landscapes to thrive. Without these, the very sustenance on which much of rural life depends is at risk. Deprioritising green measures is also a jab at social resilience and, ultimately, an anti-farmer measure. 

Lastly, member states may also decide to allocate more resources from the NRP fund to agriculture and rural areas based on their individual needs or desires. This puts agricultural measures in competition with other policy areas covered by the NRP, such as fisheries and cohesion, risking fragmentation and widening inequalities between farmers across different member states. It also leaves member states with significant autonomy in deciding which measures to prioritise, and ultimately risks a race to the bottom, particularly in a context where many national governments are driven by conservative forces keen to hollow out environmental safeguards. 

Given the lack of dedicated funding and uncertainty about how member states might spend CAP money, what is left? 

Certainly not voluntary crediting schemes. Unfortunately, the European Commission’s own Vision for the agri-food sector gives pride of place to the CRCF as an opportunity to create “additional income opportunities for farmers”. 

More worryingly still, the Vision mentions the possibility of complementing this with “developing opportunities for nature credits”. Such programmes suffer from many of the same issues outlined above. They primarily benefit large-scale industrial operations over small, diverse farms, and promote green grabs to the detriment of rural wellbeing. Thus, a potential reliance on carbon or nature credits – which themselves present dubious climate benefits and risk threatening biodiversity – would directly undermine this.

No magic beans

The Treaty on the Functioning of the European Union underlines the need to “ensure a fair standard of living for the agricultural community”. Unpredictable, volatile carbon markets will not guarantee this, particularly not with draft carbon farming methodologies that ignore key socio-economic concerns. Watering down the CAP, or leaving it up to member states to decide how to spend CAP money, will also be harmful both to nature and to farmers. 

It is time that the EU took its obligations seriously and implemented a robust, targeted system that tackles inequalities, both between small-scale and large-scale farmers, but also across genders and age groups. This system would need to improve access to land, enhance intergenerational justice and solidarity, and rectify rural abandonment. It would also need to guarantee synergies between socio-economic and environmental issues. The Commission should go back to the drawing board, both to incorporate socio-economic safeguards into the CRCF methodologies and to fundamentally rethink the future of agricultural policy. Anything less is likely to fall short.